China trade battle kicks off; markets take it in stride

China in turn imposed 25-percent levies on more than 500 American products also worth about 34 billion dollars.

However, China stopped short of actually saying it had implemented tariffs, stirring market confusion.

"After the U.S. activated its tariff measures against China, China's measures against the United States took effect immediately", said Lu Kang, spokesman for the Foreign Ministry. Chinese 10-year treasury futures for September delivery CFTU8, the most-traded contract, were 0.26 percent lower at 95.590.

Beijing's response came within minutes as it imposed a series of levies on a similar quantity of U.S. imports. The Trump administration has launched a national security investigation into automobile imports that could lead to additional tariffs.

Tracking the journey of the vessel, Peak Pegasus, as it motored towards the northern Chinese port of Dalian was the 34th-highest trending topic on the country's Twitter-like Weibo on Friday, beating out the World Cup, showbiz gossip and Beijing's escalating trade war with Washington.

Wall Street dropped on Tuesday, giving up early gains in a truncated session ahead of the Independence Day holiday on Wednesday, while technology shares came under pressure just a day after their solid start for the quarter on Monday.

Tan concedes that the current the consensus appears to be that a trade war will hurt the rest of the world more than the US.

Imports of semiconductor-dense products like televisions and smartphones so far have been spared by Trump, but they could be hit if the trade dispute grows.

Trump has railed against Beijing for intellectual property theft and barriers to entry for U.S. businesses and a $375 billion USA trade deficit with China.

It also underscores China's new boldness in trying to seize leadership amid divisions between the United States and its European, Canadian and Japanese allies over issues including free trade, climate change and foreign policy.

The state-run China Daily fumed: "In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China".

"Its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades, unless countries stand together to oppose it". China could possibly take this opportunity to strengthen trade deals with other countries, shutting out trade that would have otherwise occurred between the USA and those countries.

"Companies don't know how big this may get, or how it will end". President Donald Trump , who has claimed that winning a trade war would be easy, has said that he's prepared to drastically raise tariffs on more Chinese imports. The main Chinese stock market index has tumbled 12 percent over the past month. We will not have to hunt our food with pointy sticks.

The case could be made for manufacturing to shift to these other countries - and for them to take advantage of selling to the U.S. - but that shift would take time, and it's hard to see who could match China's scale.

The tariffs target a broad spectrum of Chinese goods - such as passenger vehicles, radio transmitters, aircraft parts and computer hard drives - from industries Washington says have benefited from unfair trade practises.

The list avoids direct tariffs on consumer goods such as mobile phones and footwear. But some products, including thermostats, are lumped into intermediate and capital goods categories.

"On the US's so-called list of $34 billion in taxable products, about $20 billion or 59 percent of them, are made by foreign-invested enterprises, with American companies representing a significant portion", said Gao.